Computer Missed How the Collapsed Bridge Hurt Sales

Before losing his job as CEO of General Motors Co., Fritz Henderson answered questions about GM's dealer network. Here is an excerpt of that interview.

Ward's: How is GM's dealer elimination program going?

Henderson: Pretty much according to plan. We went through an appeal process, where we did reconsider close to 1,000 different requests. We changed decisions on about 80. We tried to do it thoughtfully; we tried to use objective criteria and then try to also apply a thoughtful process to reconsider, in case we missed something.

We'll do an impact study in the first quarter of next year, with respect to service availability — did we go too far in some small towns or hub towns in the U.S.?

Ward's: What would be some of things where you changed your mind?

Henderson: We had one dealer in Minneapolis next to the bridge that collapsed. His sales were hurt (because of that and the ensuing construction that impeded access to his store). A computer would not have determined that. That would be an extreme, but there other cases where we made some mistakes, because when you look at 1,300 or 1,400 you're going to make some mistakes.

There were some cases where we looked at it and said, “No, if this dealer were to go out the next closest dealer would be 75 or 80 miles or 100 miles and we can't do that,” so we reversed those decisions.

Ward's: And GMAC. Has that been restructured satisfactorily?

Henderson: We're not involved in its management. Last year, when GMAC converted to being a bank, we signed a passivity agreement with the Federal Reserve. We're not on the board. We don't get involved in management of the company. We have basically, less than 10% of a share. Having GMAC properly capitalized with access to funding at cost-attractive levels to be able to support GM dealers and support the sale of cars and trucks to GM customers, this is exactly what I want.